Solvency ratio

An insurer's available capital as a multiple of the regulatory requirement. The Indian regulator sets a minimum of 150%.

An insurer at 180% has headroom; one drifting toward 150% is approaching a constraint that limits its ability to write new business and may force a capital raise.

For a life insurer the ratio is affected by the mix of business written, since protection products consume capital differently from savings products. For a general insurer it responds to reserving decisions and to investment market movements.

A ratio falling steadily over eight quarters is a capital raise being announced in advance.